Business · Economy · 1 hr ago
Brazilian Senate report preserves DF fund rules and payroll tax relief
Senator Eduardo Braga presented a revised fiscal adjustment plan for President Lula’s government in Brazil.
The plan keeps the current formula for payments to the Federal District fund, which could leave its spending outside some proposed limits.
It also raises the planned cut to tax benefits from 10% to 20%, with an estimated R$15 billion in savings in 2027.
Some incentives would be exempt, including those for technology and semiconductors, vehicle purchases by people with disabilities or autism, and a payroll tax relief regime.
The revised plan estimates a R$45.1 billion to R$56.1 billion improvement in the 2027 primary balance, up from the previous estimate.
The Senate was expected to vote on the bill Thursday, and it needs 41 votes to pass.
Senator Eduardo Braga presented a new report on the Brazilian government’s fiscal adjustment plan.
The report preserves the current method for adjusting transfers to the Federal District Constitutional Fund and keeps payroll tax relief for some sectors.
It raises the estimated improvement in the 2027 primary balance to between R$45.1 billion and R$56.1 billion.
The report increases the proposed cut to tax benefits from 10% to 20%, while exempting several incentives and regimes.
The bill was due for a Senate vote on Thursday and needs 41 votes to pass.
- Who
- Senator Eduardo Braga presented the report. The bill was authored by Senator Jaques Wagner.
- What
- The report preserves rules for transfers to the Federal District Constitutional Fund and exempts some sectors from tax-benefit cuts.
- When
- Thursday, November 12, 2026. A previous version was presented on Wednesday, November 11.
- Where
- Brazil’s Senate.
- Why
- The report is part of the government’s fiscal adjustment plan. The stated aim is to improve the 2027 primary balance.
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Braga presented an earlier version of the report, which estimated a 2027 primary-balance improvement of R$43 billion to R$54 billion.
Braga presented a new report after meeting with Senate President Davi Alcolumbre and Planning Minister Bruno Moretti.
The bill was expected to be put to a Senate vote and required 41 votes to pass.
- 2027 primary-balance improvement
- R$45.1 billion to R$56.1 billion
- Federal District fund transfers
- Continue to be adjusted by the Union’s net current revenue
- Proposed tax-benefit cut
- Increased from 10% to 20%
- Estimated 2027 revenue from tax-benefit cuts
- R$15 billion
- Amendments
- 20 of 53 were accepted fully or in part